Unga Group has reported a reduction in its full-year losses for the year ended June 30, 2024, as operational efficiencies and stronger commercial activity helped mitigate the impact of a challenging economic environment. Despite a revenue dip to KES 23.7 billion, down from KES 24 billion in 2023, the company saw its operating loss narrow to KES 275.6 million, a 37% improvement compared to the KES 440.6 million loss posted in the previous year.
The company, which specializes in food and animal feed production, attributed the improved performance to several key strategies. These included a 5% increase in product volumes and enhanced customer experience, both of which bolstered its market presence. Unga Group also made the strategic decision to lower its selling prices in response to reduced raw material costs, passing the benefits on to consumers.
“We have focused on delivering value to our customers by strengthening relationships with farmers and industry partners, which has helped increase farmer productivity and boost consumer trust in our products,” the company said in a statement.
However, despite these positive trends, Unga Group remains mired in financial challenges. Its loss before tax stood at KES 804.9 million, though this was an improvement from the KES 1.2 billion loss reported in the previous year. The loss for the year was KES 669.6 million, a reduction from KES 959.4 million in 2023. This was attributed in part to the persistent high finance costs, which amounted to KES 559.4 million, as well as adverse effects from poor-quality maize grain following heavy rains during the harvest season.
The company’s net finance income also took a hit, with finance income decreasing sharply to KES 13.3 million, down from KES 31.4 million the previous year, highlighting the challenging macroeconomic conditions. The directors, however, expressed optimism in their outlook for the coming year, albeit with caution, citing a complex and evolving business environment.
“The economic landscape remains complex, with domestic monetary policy shifts and exchange rate fluctuations posing additional challenges. However, we continue to see slow but gradual improvements,” Unga Group said.
The company has also been focused on sustainability initiatives, including the installation of solar power systems in its facilities, which helped reduce energy costs. This initiative aligns with Unga Group’s broader strategy of improving operational efficiencies as part of its margin-improvement program.
Despite the progress, Unga Group remains cautious about the future, noting that geopolitical tensions and global supply chain disruptions are expected to persist in the next financial year. Additionally, high interest rates, currency volatility, and raw material procurement risks will continue to weigh on its operations.
“The outlook for 2024/25 remains challenging. We anticipate continued disruptions in global supply chains, but we will stay vigilant and adapt to changes in economic volatility, particularly with regard to interest rates and currency risks,” the company noted in its statement.
With no dividend declared for the year, Unga Group will continue to focus on operational resilience, margin improvement, and maintaining high safety standards for its products, according to the directors.
